Commentary: How to Compete with Amazon’s Lower Free Shipping Threshold

Tags: Retail, E-commerce, Logistics, Supply Chain

Sarah Engel is CMO, DynamicAction

Amazon recently announced another slash to its free shipping requirements and is now down to $25. Amazon understands their data better than any retailer in the industry. The company is quite literally built on the ability to understand and take action on data, be that customer buying patterns, price optimization, or competitive information. This move to shift back to a $25 free shipping price point means that they are taking a calculated measure to attract or gain back non-prime shoppers they may be losing to Wal-mart or other retailers.

It is a careful balance for Amazon, who benefits greatly as shoppers become Prime members. So, they have consistently tweaked that balance of shipping price and time-to-ship over the past few years. This $25 free shipping threshold only applies to eligible items, and is standard shipping time 5-8 days, versus 2-day or even same day free delivery for Prime members.

One of the strongest positions a retailer has to compete with Amazon is using their store footprint to their advantage rather than their detriment. This means connecting data from every channel and having the ability to take action on it at the speed of Amazon. It also means using that data understanding to create an in-store experience that Amazon simply cannot compete with.






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